Lenovo-IBM Deal a Response to Slumping PC Market

As PC sales continue to slump, Lenovo is looking for acquisitions to help it brace for the decline. The WSJ’s Yun-Hee Kim get details about the deal from reporter Juro Osawa.

This transcript has been automatically generated and may not be 100% accurate.

I ... the the ... Chinese PC maker Lenovo is in talks with ITE and to buy its server business ... and a potential deal that could be worth billions of dollars ... welcome to Asia today I'm unique in ... joining me on sat is Asia technology correspondent Curacao ger things for joining us today ... actually I really cute steel in the industry ... we saw on the hill to buy IBM's PC business in two thousand and five ... now they're looking back at him again for the server business can talk a little but about why ... so Lenovo is close to becoming the world's biggest PC maker but this is an industry that's going through really tough times ... and a lot of people talk about the decline of PCs in on the consumer side people buy more tablets and smartphones ... in the business side in weak economies hurting you know ... of office demand for PCs ... so ... for the Novo this will be a move to establish itself in differ markets within the broader computing industry like servers ... are at a better in terms of ... margins PCs margins of error even though the moment ... so this is of ... move for them over to the beyond PCs ... a little bit about the potential challenges to the DL ... on when Lenovo bought IBM's PC business in two thousand and five dollars Peanuts scrutinized by the U S government ... to talk to us a little bit about the regulatory risks ... that's the one of the of ... key issues um ... the above with the end of this deal will come through and Dom ... any foreign investment in U S firms see links to national security ill or critical technology ... could face of reviews to concerns and a ... the to some five deal with the ID with IBM did come ... I'm you know under scrutiny and ... what's so there are aam the political climate right now ... is this a lusty era I ... it's a non this is a favorable for this kind of position ... after it ... on the CIA this ... of ... congressional report in the US ... that I raise questions about the Chinese telecom equipment companies Huawei and ZTE ... saying that their equipment could be used by the Chinese government ... to spy on Americans and the Chinese companies denied the allegations but ... I'm certainly there are more of debates about the Chinese investment in terms of technology ... right so it seems like Lenovo has big ambitions even stepping up acquisition is really ... how do you think on the server ... acquiring the server business will help them and you think this will prepare them for a post PC era ... Lenovo has been taking ... several different sets of ... because the PC market is you can't expect the growth in PC market in terms of revenue or profit so aam ... the company has been investing also immobile devices like smartphones ... and Dom time ... no black city now is the second-biggest of smartphone vendor in China ... which is the world's biggest smartphone market but ... because the business still needs time to grow and ... to you know become of global smartphone players it ... will face a lot of challenges ... and so the other stuff that Lenovo is obviously taking is to go into servers more into ... those businesses D on PCs ... and that this could be one of those steps to possibly help Lenovo prepare ... for a further decline in the overall PC market ... and I thank you Brian much Jerry side ... productive elements ... for monastery to go to WS J dot com I'm unique in